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NEW DELHI: Tighter scrutiny of Indian manufacturing sites by US drug regulators, increased competition and weaker currencies in key markets such as Africa and Russia are likely to slow down the growth of Indian pharmaceutical exports over the next four years, says a new study.

The annual growth rate in pharmaceutical exports may almost halve to 7.98% by 2020 from 14.77% CAGR during 2010-2014, according to a joint report on Intellectual Property Rights (IPR) by TechSci Research and industry chamber Assocham.

The US Food and Drug Administration's (FDA) increased scrutiny of the quality of products from India's drug manufacturing plants is causing a decline in growth rate of pharmaceutical exports to the US, the study noted. Wockhardt and IPCA are among a host of drug makers that have come under the US agency's glare on charges of lapses in manufacturing procedures at their Indian facilities.

The Assocham-TechSci Research study also pointed to delays in approvals in other key markets. "Lower growth during 2015-2020 is anticipated on account of the regulatory scenario in top export markets of the US, Russia and Africa, where regulatory approvals are being delayed," it said.

A steep decline in currency in markets such as Africa, Russia, Ukraine and Venezuela is also expected to "add woes" to drug manufacturing companies supplying to those regions because weaker currencies will impact their ability to generate high revenues, stated the report.

Another reason for slowing pharmaceuticals exports, according to industry experts, is rising competition from emerging and developed markets.

"Other low cost countries such as China, driven by years of government support, are now moving up the value chain, thereby threatening India's position in the segment. Players in the developed market are [also] becoming more competitive," said D G Shah, secretary general of Indian Pharmaceutical Alliance (IPA), which represents the interests of leading Indian generic drug makers.

According to the Assocham-TechSci Research report, consolidation of pharmacy players in North America is also expected to add to this decline in exports over the next five years.

Among other factors affecting the growth are dilution of the industry's core competitiveness and the decline in new patent expiry opportunities in the oral solids space, said IPA's Shah. IPA has also expressed concerns over long-term impact of delays related to manufacturing issues on supplies of generic medicines.

The World Health Organization, at a recently held workshop in Geneva, identified global stock outs of several essential medicines, according to Shah. "The closure of many manufacturing facilities and long delays in resumption of supplies from these facilities is one of the factors for these stock outs. The IPA, working with the US FDA, is trying to compress this time to resume supplies of quality medicines," he said.

Pharmaceutical exports to the US already suffered a decline in the year-on-year growth rate to 9% in 2014 from 38% in 2011, according to data from the commerce ministry quoted in the study. India is the largest supplier of medicine to the US and pharmaceutical exports from India to the US rose to $3.76 billion in 2014 from $3.44 billion in 2013, the study revealed.